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tv   Charlie Rose  Bloomberg  July 26, 2014 10:00pm-11:01pm EDT

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>> from our studios in new york city, this is "charlie rose."
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>> on april 5, millions of after gans took to the polls to abdullah ew president rejected the result of the runoff and threatened to . there was a runoff. create a parallel government giving the country on the verge of collapse. all the votes would be audited by international observers. the audit has been suspended twice. the result of the runoff rescheduled for july 22. as of wednesday, only 4.5% of the roughly 22000 and ballot boxes have been xamined. joining us from kabul is ashraf ghani. we had earlier last week abdullah abdullah. it is a pleasure to have a chance to see and talk to someone who has been on this program before. welcome to the program again. >> it is a pleasure to be with
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you. and the public of the united states. >> thank you. where does the audit stand today? >> the audit began in in earnest in all the criteria has been agreed. we hope it will require full speed and every day hopefully will be a significant count. unfortunately, it has been suspended for three days because our major holiday is coming. otherwise, the election commission, the international observers, and the candidates are looking forward to carrying out the full audit. >> wind you expected to be when do you expect it to be completed? >> we do not know because i think it will take a week to
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really see how many ballots can be counted in a day. n that basis, the united nations which is supervising the process would determine a date. this is to make sure the public is not given conflicted dates and then expectations are built around that. >> do you anticipate further disruptions? >> i do not. i think all the rules and procedures have been worked out. we are all very keen to make sure that the audit is carried out in the terms that have been agreed. it is a major logistical undertaking. a significant number of the ballot boxes from our provinces, we have 94 provinces, high mountainous areas, some in difficult remote locations are
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in the process of being moved to kabul. an assembly line is being set up in hangars and the commission so that all the votes can be examined and the results determined. >> is there clear evidence that there was significant fraud in this election? >> no. the 5% that has been counted so far does not show any major rregularities. there are allegations of fraud. because the allegations have cast a shadow over the egitimacy, i propose 100% of the audit which has been carried out which is unprecedented in elections. this will put to rest any allegations. if there is any evidence, it will be found out, otherwise it will be very clear that the people participated and it will be a day of celebration.
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we will make sure the results of the participation has been registered and stood and honored. on d you accept the audit the basis that perhaps there was some fraud on both sides? >> no. accepted the audit to make sure that full transparency was provided. when any candidate or their people make allegations of fraud, i think it is our duty in the democratic process to make sure that these allegations are ully investigated. i had repeatedly proposed to my colleague that we have a understanding that we would not accept or condone any fraud of in the election. now, that did not happen during
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he election. now we have joined hands to make sure that the public knows how they voted, what were he number of ballots, and that each ballot as been validly examined so that there is no doubt. transparency essential to legitimacy so that the next president of afghanistan will have the full benefit of legitimacy that comes from a transparent and fair voting process. >> do believe the allegations of dr. abdullah that there was widespread fraud and that explains the difference between the first election and the runoff? or do you believe he has other motives? >> let us put that behind us. whatever the allegations, there
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is a full process to test them. we have agreed to a testing process that can be determined. this is a matter of weeks, not a matter of months. the community and the public will soon know whether there was any irregularities versus allegations of white fraud. should there be any, we do not condone it. i condemn any single act of fraud from one vote to as many as there may be because i believe in public participation and honoring the citizens of his country. they braved insecurity, they overcame threats of violence. men and women came out and stood in long lines twice. that is the central fact of
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these elections. a grassroots movement that reated the conditions of the birth of the modern citizen in afghanistan who is a fully empowered individual who votes on the basis of her or his preferences. it is important to celebrate that a compliment. -- that accomplishment. is important to make sure any allegations are investigated. >> does this put the rest any effort to form a parallel government? >> absolutely. it is crystal clear that both of us will abide by the esults of the audit. the reason we were insisting audit ise a fully 100%
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that a 50% audit, which was initially proposed leaves room and out. both of us have made this commitment and beyond that commitment we have agreed to form a government of national unity so the people afghanistan temporarily voted for two candidates would be again united as one nation pursuing stability and prosperity which is our key objective and desire. >> does a government of national unity assume sharing a power? >> the government of national unity assumes a common wide ranging program of reform to put an end to corruption, and lawlessness. to generate economic growth so we can come out of dependency,
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to pursue peace. to provide the platform for public participation. to make the government accountable to the people because it is the people who we ork for. it would bring us all to focus on what matters to our people. our people are poor. they are unwell. they need help. they need education. they need water. they need sanitation. more than anything else, we want to overcome violence and dependence. our people are dying every day. we need to overcome this. we need to give our country a clear sense of direction based on a vision that is credible and a system of governing that is effective and transparent.
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>> i am very interested on what you would do if you were chosen as president. i want to talk about those issues, but let me just stay with the election and the government of national unity. here is what dr. abdullah told me in an earlier interview about a government of national unity. i want you to listen to that, please, and tell me if there is any difference on how you to perceive it. here is dr. abdullah. >> help me understand what is the commitment to a unity government. both you and mr. ghani said you would form a unity government and whoever wins will have the top post in the other will be prime minister? >> that is right. we both agreed on the formation of the national unity government. in the presence of secretary kerry. that is a political agreement. there is a technical agreement on the issue of the audit. it is important that both
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agreements are implemented in good faith. we are dealing with it as such and we think it is both important. while our focus is mainly on the auditing. at the same time, we think the political agreement is also important for the future of the country. it creates a sort of win-win situation rather than winner ake all. as much as emphasis as we do and we put on the fairness of the audit process, at the same time, we realize that there are needs of the country which has to be addressed in the formation of the national unity government will help afghanistan. >> my assumption is if you are elected president and he is as part of a national government prime minister, you will have the power. am i correct? >> our constitution is modeled
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under the constitution of the united states. the presidential system. the president authorities are defined in the constitution. what we have agreed to is to create an office for two years. that would be the equivalent of a chief operating officer or a chief executive officer. the duties of this office for the next two years will be defined by residential egree. -- decree because the constitution allows for the authorities of the president when circumstances require it. we have agreed within two years the president would initiate the onvening of a constitutional convention to consider amending the constitution to create an
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office of an executive prime minister. not a parliamentary system, but one -- like many countries like france and many others like russia that can do this. the circumstances of afghanistan require consultation. while the authority of the president is clear in the accountability of the president to the country is very clear, our national interests demand hat we consult closely because reforms are required in both national and international xperience. carrying out intensive and extensive reform is best done hen you consult stakeholders and arrive at full
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understanding. dr. abdullah has enabled that. i would be honored to consult very regularly with him if i were president and push forward a common vision and implement that vision for our country. >> if the votes of the first round are duplicated in this runoff and the audit of the runoff, a remarkable comeback. how did you do it? >> by taking a list from president obama and marshall gentz. it is a grassroots campaign. we reached every single group of stakeholders in the country through painstaking process. one of the things that did not happen because the choices, dr. bdullah chose not to
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participate during the second round in the national organized ebate. what we did was to take the town hall meeting that new england has made so famous -- but things he television, broadcasted nationally. for instance, when we had a discussion with the youth. 6 million people across the ountry watched it. we had a meeting. 3000 people were assembled both shiite and sunni and endorsed us. there was a mosque to mosque campaign particularly in sick -- insecure areas of the country which resulted in creating peaceful condition. it is the same thing that urge our women to come out. here is a family headed by a
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religious color whose women had not gone to medical clinics for 0 years. he rented vehicles and carried his own wife and the entire village. this was truly a mass movement around the country with the urban areas of the country engaged in a very intensive discussion. property rights. that put a burden on the people because of corruption and lack of certainty. it will be turned into solid property rights. two women presided over a large public discussion. many such meetings, we campaigned in different parts of the country, identified the
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issues. in the last five days, there was a door to across the 34 provinces. the results are now posted on the election commission's ebsite and it shows that our votes and angle severed -- an eagle single -- and every single province increased. some significant enough to make difference. our voting pattern is a national phenomenon. there is no province in which we have not succeeded in reaching the public and creation of the consensus. during this campaign, we have shown that people who a year ago were not willing to talk to each other were brought on the same platform and campaigned intensively across the country. this is really -- has been a really proud moment for us to generate such a turnout in such a scale of participation. >> if you win and are the
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president of afghanistan, i am interested in several relationships. first with the united tates. would you sign a security agreement and what would you like for that is -- security greement to say? >> i would like to thank the american public first of all. he american congress and the american government for their sacrifices and pressure during the last 13 years. the relationship with the united states is a strategic relationship that is based also on the value of democracy. our people have demonstrated that we like democracy and we like our vote to count. i negotiated -- i was one of the three people involved in
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negotiations of the bilateral security agreement. i find it both national interest and in the united states is interest. i will be signing it within days of taking office. the agreement has been reviewed by a consultant, counsel across the board. afghanistan has recommended that it be signed. i find it signing in our interest and i hope we can demonstrate that president obama's decision to scale down the number of american troops very significantly within 2.5 ears can be matched by a major program of reform of our security institution, of our legal system, our system of governance, and our economy so
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we can demonstrate both to the american public and the world at large that we can take charge of our destiny and afghanistan is a working and growing proposition. we would like to broaden the partnership from just being focused on security to being in economic -- an economic and cultural relationship. we would like a university to university set of relationships. people to people. > do i assume you are saying you were confident that afghan can, as american troops result, fill the void and therefore, the schedule that has been proposed and committed to by president obama will be adhered to by all concerned? >> i had the honor to lead for
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three years the security transition. when i began, people thought it was suicide to accept a job where most pundits thought it was impossible to reduce the number of american troops by over 100,000. i worked with some of the greatest military minds of the united states. general petraeus, general allen. in the process that i designed and then reached agreement was in phases. instead of jumping straight into a pool and not knowing whether it is empty or full, we adopted a strategy of testing in five phases. the u.s. troops with through with honor, with full honor and dignity. the significant commitment was made to building up security forces. the forces has shown that their patriotism and their commitment. now we are assuming that the
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process of building that security force would be upported for 10 years. united states' administration has repeated that assurance that we need to understand and cknowledge that they would not just be the administration but the congress and the american public. and the media. that would review this. given the decision that the president of the united states has made, we need to focus on these 2.5 years. we cannot waste the moment. we must make every effort and then we will see where our merican partners would see the
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accomplishments and then we can make sure the commitment of the 10 years are honored and support continues. >> do you think there is a lesson to be learned from iraq? > there are. in one of the key lessons that ortunately from day one that i entered as a candidate, we insisted on inclusion that does not work in politics. a winner take all approach is counterproductive in conditions f post-conflict. we need to have a sense of a sin is sin front and center because it is the citizen that figures out the stability of the overnment.
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all parties must bring their differences within the government, bring people within the tent so that the country at large can be secured from the disputes of the elite is a very important lesson. in iraq, they practiced exclusion. they do not bring everybody together around a common table. they did not create the assurance that government is not an instrument to be used against them but an instrument to work together for realization of common goals. >> what is your assessment of the taliban threat? are you prepared to -- negotiate with them? how do you see the nature of those negotiations? >> a government of national nity means an end to all parallel governments. we must create the condition that there is only one government in afghanistan with the full legitimate mandate of the people that speaks for the country. one of the slogans on the basis f which i run.
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the taliban is and political reality of afghanistan. they cannot be wished away or eliminated through use of force. all conflicts must be at the negotiating table. we are committed to ensuring that those issues that are grievances, that are about participation, that are about aving of political solutions are brought forward. the key to this is that the taliban who believe in operating themselves from larger regional networks of violence, that are dedicated to nothing but destruction, and would like to use our country as a battlefield for half-baked ideas. this means serious engagement. this election has already created a major platform for peace because in the insecure rovinces, previously conceived a wide provinces of the country where participation was
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impossible, our religious colors and our people have created the onditions of engagement. >> would you sit down with omar and talk about the conditions for taliban forces to lay down heir arms? >> peace requires sitting down with those who are engaged in onflict. one of the key advantages that i bring is that i have not been a
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participant in conflict. the country largely has funded to my appel of clean hands. one of my hands is free of the blood and my other is free of corruption. we need to engage in discussion. discussions must be based on preserving the gains of the last 13 years the same way we have insisted on formation of overnment, national unity. we both acknowledged our constitution is our key framework. there was a mechanism for changing the constitution, not the fundamental values of the constitution, but specific things that can improve governance and bring people together. >> you had the support of president karzai's brother. it is said you had the support
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of president karzai. he is, as you know, among the american public, a controversial figure and among members of the u.s. government who have dealt with them, there have been consistent allegations of orruption. he would not sign a security agreement. so, what is it that you think karzai's legacy? >> president karzai's elder brother endorsed our campaign. e were very engaged. i have not talked with the president. we have maintained cordial relationships, but dr. abdullah, thanks to the legacy f the very large political party, it is a major presence in government. governorships, police post, etc. i have not appointed anyone in the government. i have not had backing from the government. the president -- president karzai took power in a very difficult time. his legacy will be both a person who has managed to maintain an
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umbrella under which very different people with different backgrounds and persuasions have managed to cohabit. also, a legacy where corruption became a cancer that could not e contained. we are determined to build on the positive legacy and deal ith corruption in a really determined manner because without tackling corruption, our people in general and powerful people -- our poor people and youth and women who have been the key drivers in the campaign will not have a place under the sun. >> as a keen student of american
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economy as well as american politics, you know that we have here a kind of standard of ooking at presidents and easuring the first 100 days of their time in office. what do you hope to accomplish in your first 100 days after your noggin president if in fact you are? >> inaugurated president if in act you are? >> within the first 100 days, the first is to set a course. that means our partnership with our people will be turned up to set of reforms.
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we will evaluate every ministry in a public manner. find its objectives, allow for honest, capable people to come o the talks. this will allow us to deliver on the promise of good government. we promise to transfer 30% of the national budget to the provinces because our system is centralized. our provinces do not have to chool resources on the base to which to be accountable to people. the reform of the security
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sector will start in the same 100 days. the office of the commander in chief, a function of the president of afghanistan will not be turned into an office. i will make it so that each eight hours we will have a security report given that security is the number one desire of our people. in concrete ways on the basis of measures and evaluation. then we have a very busy international council. our first action international will be renewing our partnership with the united states by signing the bilateral security agreement and by making sure that both the strategic partnership agreement and the bilateral security agreement are firmly in place. imultaneously, the 100 days we will be engaging. china has become very interested in the peace process. also, the new chinese president has opened up an initiative, a ajor initiative that the
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region, the surrounding neighboring countries should benefit from china's development. seeking these relationships and ensuring that both the region and the world at large sees us moving and moving the engine of government to full speed. it is going to be sped up during these 100 days and we very much hope the public would see the results of its massive participation and accountability to them. >> i thank you for this time. we look forward to watching the audit and the political and economic developments in afghanistan as you have suggested earlier. >> i very much thank you for the opportunity. would like to thank the american public for the engagement. > jim chanos is here, the
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president of the multi-billion-dollar investment fund. he gained prominence in 2001 on the wager of the demise of enron. he is been focused on china. following the credit bubble that has yet to occur in shanghai. he warned by doing business in the cities i like going to new york on the eve of the financial crisis. i am pleased to have him back at this table. welcome. you were bearish last time. are you still bearish? >> we are still bearish. not much has changed except the credit public is gotten bigger. everything that we talked about in 2010 has just basically doubled whether it is credit, the amount of vacant real state. >> some people argue the chinese appreciate the threat of a bubble and they are doing more in order to address it then other nations have.
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because of the nature of the political system, they can do it. quite the same people do not see it four years ago and now they believe the authorities have it under control. the problem is data. we take it with a large grain of chinese salt. the data shows the credit is completely wide open in that more and more credit is going to support less and less growth. the chinese economy based on construction is really manufacturing growth. the minute you stick a shovel in the ground and put up a building or bridge, that counts as gdp. the problem with that model is when you finish building it, you have to put up another one. is not based on ongoing consumption. in this reform, it still is elusive. >> many of those buildings are still vacant. therefore, the economy has gone from gdp growth of double digits down to seven plus percent.
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>> we have to color this with the concept of -- china is the only major industrialized nation that knows its annual gdp on january 1 of that same year. >> because? if they make it what they say there's going to be or whatever they say is what they will eport? >> we have a guard to -- we have a cartoon of the seven them standing at a table and saying ok, the growth will be 7.5%, how do we get there? >> i know corporations do that as well. so, clearly, there is a lot going for the economy. they have an emerging middle class, they have social pensions. they are making a serious effort
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o deal with corruptions. clearly, a serious effort to try to deal with pollution. it is a priority for them. the third priority they say is sustainable economy. serious people with serious skills. >> they absolutely are very erious people. he technocrats are not to be underestimated. there is a saying in china -- the mountain is high and the emperor as far away. all of the action when the rubber hits the road happens at the local level. that is where the technocrats in beijing, although they can direct things, there is a little bit too much space that is put in the central committee and planning committees because at the local level, the centers are still to produce numbers and growth at any cost. the anticorruption drive which
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is something we have been focused on for the past year and a half is actually much more than that. it appears to us to be a far more serious effort to cleanse the party. if you look at the people's daily of overnight announcements -- there are four or five head shots put up on twitter, on the website of people being taken away every night. it is almost as if you are seeing a soviet style purge through social media. people are falling out of buildings. i am not exaggerating. >> i think we know about all the prominent people that have been -- >> there are a lot of people elow that level. it is happening impact on the economy because a large number of things like apartment sales, high-end luxury products were bought with basically dirty money. >> is there some sense that he is becoming more authoritarian? >> i think so.
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>> validating his own personal power. >> in his own way, he is on a lot like putin. he is a nationalist. i think that two years ago or three years ago, he would be first among equals. i think it is fair to say he is first. he is going to be much more firm, much more aggressive, and much more muscular and the way he looks at the world. >> and eliminating opponents? >> i think that is happening as well. >> consolidating his power and that might be a challenge to them. so, when you look at them both in terms of things they might want to do, what is it that is essential for them to do if in fact they are able to deal with this possible bubble? >> navigating the credit issue will be the issue. reporting the economy so it is less reliable on investments and more reliant on consumption. more traditional economy.
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>> which is exactly what they are trying to do. >> since we sat down for years ago, investment has increased, not decreased. for all the talk and optimism about reform, the results still showed that in fact it is not happening. that is the troubling -- >> number one, the dramatic shift they are trying to impede is an export economy to a domestic demand economy. they hope they have a rising middle class that will enable that and manufacture all these things and it goes on and on. you are saying you don't think they are able to do that within any reasonable amount of ime? >> first of all, it is much less an export economy than people
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think. net exports last year was only a couple of percentage of gdp. his is down double digits from a couple of years ago. this is still basically an economy of consumption and nvestment. they have to flip it. they have to flip basically so that the ongoing consumption services are a recurring form of rowth as opposed to more projects because ultimately, you end up with no projects. that is still the issue that hey cannot seem to navigate. very time the economy slows, i like to joke that china is the only economy where when growth
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slows from 7.5% to 7.4%, what does that tell us? it tells us they are worried about hitting the brakes and growth not going former reality point of view to something much lower even though we will never see that. i think that is a real challenge of looking at china from the outside which is trying to find out what is really happening beneath the gloss of the officials. >> you also want to know what their long-term ambitions are. the consolidation power often has a reason you want to consolidate power and a reason what you want to do. do we have any sense of what he wants to do with china? what he wants china to become? >> this leadership in china is pursuing a more muscular strategy and externally. that is new. the dispute with japan, the claims in the south china sea, the american pivot to asia all is bringing forth a more firm chinese response than we've seen in previous decades even.
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so, i think that that is something that is new. whether it is just a resurgent nationalism, whether as any country grows, it exerts its power politically and militarily, it remains to be een. that is a new development. i think china's ongoing outreach to other countries like countries in asia, building very quietly a port facility to pakistan with a high-speed rail to get a port on the indian ocean, all these things are new developments and are going to have major implications for our strategists and our political leadership. >> turning the subject to japan, you have said the biggest threat to asia is not china, but the pan. japan. >> what i meant by that is that the change to japan is suddenly a destabilizing. the fact that japan is getting ready to announce its constitution. >> there seems to be some
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ullback from that. >> there is pullback within the country but the leadership is very intent on basically bringing forth a new look japan. that new look japan is scaring china. i think it has basically brought to countries that peaceably coexisted for years in the region back to butting heads. we have seen that in last two years. >> what is the role of the u.s.? clearly, we have alliances with japan. we have relationships with vietnam and korea. hat is our role? >> that is a good question
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because the $64 billion question is what happens if japan and china clash? i don't mean a full-fledged war, i mean someone miscalculation in the open seas and a boat is sunk or a plan is shot down and now you're the crisis. what happens? o we pledge the full faith and support of the u.s. military ehind japan to fulfill our treaty? i don't know. a lot of strategists fear we won't. will we send american boys and harm's way? don't know.
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this is a new catalyst we have ot had to worry about in the last handful of years as we have been focused on the middle east and elsewhere. in fact, our alliances in the pacific are very much open and active. with what is going on with china and others, i think the obama administration is right to consider the need to refocus on asia. >> has that had taken place? >> not practically. we move forces and arena units and strengthen ties with countries like vietnam. reopened strengths and ties with the philippines. this is hall of f -- this is all early moves in a chess game. i teach the history of financial fraud. it came about a number of years ago. i was joking with the former resident at one of my -- i would go get my doctorate in history. he said we have something we want to talk you about. he asked if i would be interesting teaching at the yale school of management. i jumped at that chance. >> why? >> the ability to teach graduate
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students a framework about thinking about corporate wrongdoing which goes back as long as there has been orporations. it is really a history class back in the late 17th century, the first ipo in england. when you teach to frameworks as well cases and the wonder, you begin to realize that bernie made off with just one in a long time line and it has been going on for hundreds of years. >> after 2008, nobody is going to jail. we had people go going to jail for insider trading although the most recent case came back. should there have been more people indicted? > i think so personally. we know now with what attorney general holder has said that in fact the justice department took an economic factors and financial factors in deciding
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whether or not to prosecute individuals. they are on the record for saying that. that is a very, in my view, very uestionable form of justice in this country that if you in fact work for a too big to fail institution that you can get away with all kinds of criminality's that the average person cannot. i think still to this day most people in the united states -- an amount that people from oston to washington do not appreciate. >> people do not appreciate the fact that a lot of people across the country believe there was an unfairness about what was necessary to do in order to-- >> there is still a two track system of government in this country. if you look at the response from the 1930's and even the response
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in the post savings and loan crisis as well is what president bush did post-enron to clean up the markets, there was a firm response. there was aggressive use of the justice department. that is not what we of seen. we have seen insider trading. >> it is not policy. >> to take it to its logical extreme, i pointed out that you almost get to a point where if your management team is bored of significantly large financial institution and you know that by and large the only penalty you might face is just simply
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financial fines, you might have a duty to skirt the line or closing out across the line if you think the cost benefits are worth it. that is a scary thought. >> i was a conference last week and several people made the case -- do believe that will have a prominent place? > i do not buy gold. if i was to worry about another currency outside the realm of governments which is what bitcoin is, i think being as old as i am, i would prefer gold or diamonds to a digital currency because deep down i am worried about the idea that the geniuses who ever develop the algorithms to create bitcoins at the end of day might have a backdoor that you don't know about. >> it is good to see you. conversation with artist jeff koons on the next charlie rose. >> it was nice for me to get some of the images because i do not live with all those pieces. a lot of them are kind of just fresh to me again. owned by collectors. i tend to live with other art, art by other artists. i am at my studio all day long. i do not live directly with my work, but it shows to me that it has been fun. i think i have been doing exactly what i have been wanting to do. it makes me feel more
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ambitious. i really would like to do something. i really want to put something on the table. i think i have been having a dialogue but i want to do more.
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